Dodd-Frank Inspired Regulations Harming the Poor at Bank and Check-out Counters

Dodd_Frank___bloombergbusinessweek___credit postedDailyBusinessNews-MHProNewsWhile Sen. Elizabeth Warren(D-Mass.) sings the praises of the six-year-old Dodd-Frank Act, saying, “If a bank screws up, you have someone to call so you don’t get stuck with the bill,”

in fact, consumers get stuck with the bill whether a bank makes mistakes or not.

The American Action Forum, according to what theblaze tells MHProNews, reports the true costs equate to $112 per individual and $310 per household, a direct result of expanded powers from new regulatory agencies, costs that stem from compliance alone. Based on this data, the Forum estimates the regulations have resulted in consumers and businesses spending 74 hours on paperwork with an impact of $36 billion.

Treasury Secretary Jack Lew has said Dodd-Frank and its offspring, the Consumer Financial Protection Bureau (CFPB), has provided “over $11 billion in relief for more than 27 million hardworking Americans,” but in fact, regulations have led to a 14.5 percent decrease in revolving credit.

Under the Durbin amendment, as added to the Dodd-Frank legislation, the Federal Reserve has limited the amount that banks with over $10 billion in assets can charge merchants for debit card purchases (“swipe fees”) to 21-23 cents per event.

Prior to the Durbin amendment merchants would charge one percent per transaction to cushion against the risks of fraud or overdrafts by consumers, and the average swipe fee was $0.44 per transaction. The thinking was consumers would save at the checkout counter by cutting the swipe fee in half. However, a study by the Richmond Federal Reserve reveals big-box retailers did not pass on the savings.

Additionally, the Boston Federal Reserve reports the Durbin amendment has cost large banks at least $14 billion a year or more in order to make up for lost revenue and riskier retail transactions, resulting in higher ATM and overdraft fees, stricter limits on debit card transactions and less free checking. Unfortunately, Americans at the poverty level are the ones hurt the most by restrictions on minimum balance checking and low-cost banking services.

In the presidential campaign, Hillary Clinton intends to add to regulations, which would continue to harm consumers and businesses alike, while Donald Trump said he would dismantle Dodd-Frank. ##

(Image credit: bloombergbusiness)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

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